What should you know about real estate in an estate plan?

On Behalf of | May 30, 2023 | Estate Planning |

Estate planning is integral to ensuring a secure future for your loved ones. One critical component of this process involves the handling of real estate assets. Whether it’s a family home, rental property or land, real estate often forms a significant part of an individual’s estate and requires careful consideration.

From understanding the current property value to assessing tax implications, various factors play a role in successful real estate inclusion in your estate plan. Proper planning can help ensure that your assets are passed down according to your wishes while minimizing potential disputes and tax burdens.

Understanding property value and estate taxes

Knowing the value of your real estate is the first step. A professional appraisal can provide an accurate assessment necessary for understanding potential estate tax implications.

For larger estates, estate taxes can be significant. If your estate’s value exceeds the federal estate tax exemption, a portion of it could be subject to tax, so understanding potential tax liability is crucial to devising a strategic estate plan.

Exploring options for real estate transfer

There are several ways to pass real estate to your heirs. Outright gifting during your lifetime can help reduce the size of your taxable estate. However, it comes with potential gift tax implications. Alternatively, you can leave real estate in your will, transfer property into a trust or use a life estate deed.

Handling real estate in your estate plan requires careful thought. Having experienced legal guidance can help you learn about your options and help you set up a comprehensive estate plan that will help you provide for your loved ones after you’re gone.